DA Hike: The proportionate dearness allowance for central government employees and pensioners is changed in January and July based on the inflation data available with the All India Consumer Price Index and the consumer price index data for All India is divided into two slabs January to June and July to December. Due to the increase in the DA of employees and pensioners who come under the 7th Pay Commission, effective January 2025, the DA will be increased to 55%, 2% increases were announced in March and further increases are planned for July 2025. The announcements after Rakshabandhan will depend on the half yearly inflows data from Jan to June.Release of figures for January to MayCPI data for the first half of the year will inform how much dearness allowance will increase for the month of July. Looking at the numbers so far, the AICPI INDEX lay at 143.2 in January 2025, AICPI-IW 142.8 in February, 143.0 in March, 143.5 as a leap in April, and in May with a 0.5 point increase reaching 144.0, placing DA score at 57.85% suggesting near 3% raise. However, June figures are pending, to be published on 30-31 July 2025, which will clarify the increase of DA from 2025 July onwards.The increase in dear allowance is estimated between 3 and 4 percent. Based on the current data, the score is 144.0 and DA score is 58% thus close to 3% increase in DA is anticipated. From July 2025, DA is expected to rise from 55% to 58% with a projected 3% increase. However, if there is some decline in the June score, a 3 percent DA increase is certain. The new rates will come into effect from July 2025 which is expected to be announced near Rakshabandhan and Diwali which is before the cabinet meeting. Steps to retrieve the dues are also possible.What is the process of calculating dearness allowance?For employees and pensioners of the central government, there exists a specific method for calculating dearness allowance. To illustrate: 7th CPC DA% = [{12-month average of AICPI-IW (base year 2001=100) for the last 12 months – 261.42}/261.42×100]. This applies to central government employees and pensioners whose remuneration is structured according to the 7th Pay Commission's recommendations. For these cases, DA%= (392.83-261.42)/261.42×100 = 50.26.The average CPI-IW for the previous year is 392.83. Following the calculation method, DA comes out to 50.28% of the basic pay. This indicates that the dearness allowance can be raised by approximately 50% (subject to rounding).
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